Mandatory travel pay could result from lawsuits

A series of lawsuits aimed at farmers and farm labor contractors allege that farm employees who travel to and from agricultural jobs in company buses should be paid for their time in transit—despite company policies making clear use of the buses is voluntary.

The suits, filed in Monterey and San Diego counties by California Rural Legal Assistance, charge that the employees are actually required to use the buses to get to the fields.

Farmers and farm labor contractors should be watching the cases closely, according to John Segale, who is leading outreach efforts for the newly formed California Farmers for Fairness. He said mandated travel pay, coupled with the rising minimum wage and changes to overtime laws, would represent "an economic tsunami" for farmers.

"This is all occurring at one perfect storm, and it's going to result in severe economic harm," Segale said.

Carl Borden, senior counsel for the California Farm Bureau Federation, said the state Supreme Court ruled in 2000 on a case involving whether farm employees must be paid for time spent riding to and from a worksite in company buses at their employer's insistence.

In that case, Morillion v. Royal Packing Co., the state's highest court ruled that because Royal required employees to use buses, those workers were under the employer's control and were therefore owed travel pay.

"However," the court wrote, "employers may provide optional free transportation to employees without having to pay them for their travel time, as long as employers do not require employees to use this transportation."

"For the last 18 years, that's what employers have been relying on," Borden said. "To that end, I understand employers in the current cases had written policies that company-provided transportation is at the employee's option, and that no employee is required to take it. They posted those policies on their buses and/or included them in their employee handbooks."

Mike Saqui, an attorney representing defendants in the CRLA lawsuits, said the lawsuits mischaracterize the Royal decision.

"They're attempting to stand it on its head, to say that these workers, because of their station in life, have no ability to make a choice," Saqui said. "Quite frankly, I think it's demeaning to a farmworker, and it's not a healthy view of reality in the farming industry."

Borden noted that claims made in these cases and a prior travel-time case include:

Employees were not told where to report to work the next day.

Employees were required or allowed to work while riding in company buses.

All employees rode in company buses.

The outcome of the cases has significant implications for agricultural employers, according to California Farmers for Fairness.

The group asked Dennis Tootelian, former head of the Center for Small Business at California State University, Sacramento, to estimate the impact of mandated travel pay. The study looked at a cross-section of crops—leafy greens and strawberries on the Central Coast; tree fruit, citrus and grapes in the Central Valley; and winegrapes on the North Coast. The study factored in the minimum wage—now $11 per hour for employers with more than 25 employees in a pay period, gradually rising to $15 per hour by 2022—and the overtime law gradually reducing the workday to eight hours by the same year. Payroll taxes and insurance costs were not considered.

"When you factor in minimum wage increases and new overtime requirements, mandatory travel pay is going to increase employers' labor costs by as much as 68 percent per worker per day (by 2023), compared to costs today in 2018," Segale said, citing one of the study's key findings.

Without mandated travel pay, employers' labor costs are projected to rise 10 percent by 2020 and more than 32 percent by 2023, according to the study.

"We've got a chance now to get in front of it and fight it," Segale said. "That's what we're doing right now, through California Farmers for Fairness."

California Farmers for Fairness has already held one meeting on the topic in Salinas and plans another one in a few weeks in Fresno. More information, including the full economic study, can be found at www.cafarmersforfairness.org.

(Kevin Hecteman is an assistant editor of Ag Alert. He may be reached at khecteman@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.